Strong revenue growth for Dignity helps profits rise 23%

SUTTON Coldfield funeral director group, Dignity has seen a 14% increase in annual revenues, with pre-tax profit up 23%.

The company benefited from a high mortality rate, which showed the number of deaths over the 52-week period to December 25, 2015 rising by 7% to 588,000.

Mike McCollum, chief executive of Dignity, said: “Our staff have performed tremendously in a year when we had to look after a lot more families than originally anticipated.

“Our standards remained high, as reflected in the outstanding responses from our client surveys. Our financial performance was very strong as a result, helped by our continued focus on maintaining good cost controls alongside excellent client service and investment in the business.”

The high number of deaths over the year was a rate not seen for more than 60 years.

However, the firm said it was pleased with the way it had responded to the increase in demand, with client satisfaction at very high levels, with 99% of families saying it met or exceeded their expectations and 98% saying they would recommend the business in future.

The year also saw continued growth for the group with the acquisition of 36 funeral locations from Laurel Funerals in July 2015. These have been integrated into the business and are performing well, it added.

In addition, £50m was invested in funeral acquisitions (including Laurel), adding a further 48 funeral locations overall to the group’s portfolio.

Three satellite locations were opened within the funeral business, while planning permission was granted for two new crematoria due for opening by early 2018.

The business also benefited from pre-arranged funeral plan sales, with numbers increasing to 374,000 (2014: 348,000).

The group expects the number of deaths in 2016 to revert to more normal levels.

In outlook, chairman Peter Hindley said the group had stated several times during 2015 that, based on long-term historical data, there was a strong possibility the number of deaths in 2016 might be significantly lower than 2015.

“The first two months of the new financial year have not changed this view and therefore the group’s financial expectations for 2016 and beyond continue to remain unchanged. As a result, current market expectations are that profit before tax in 2016 will be slightly lower than that reported in 2015,” he said.

“Nevertheless, the group notes that achievement of current market expectations in 2016 would mean earnings per share would have increased by approximately 30% over the period 2014 to 2016, well ahead of the group’s continuing medium-term target of increasing earnings per share by 10% per year.”